Mckay Securities Share Discussion Threads

[tiltonboy] 25/3/2011 09:50

Do not disagree with your thoughts.

[skyship] 25/3/2011 09:42

Tilts - thnx for that. Long time no....etc....

What's yr view here now? Mine remains as follows:

I know I've called this one badly all the way down; but surely having finally written off part of their over-hedged debt and removed the former FD, MCKS is now a pricing aberration versus the rest of the sector.

At 120p the yield on a maintained 8.2p divi is 6.8% and the NAV discount to the revised 195p = 38.5%.

No nasty surprises left in the locker, financing secure for 5yrs, LTV @ an acceptable 44% - though not certain of that figure post last month's changes!. Also don't know what they did with the £30m to be rolled over this month!

Still, assuming that was all agreed as part of last month's changes, MCKS should be reporting a clearer picture when June's Finals come around.

In which case: At a target level of 150p the yield would be 5.5% and the NAV discount would be 23%.

Would that be an over-valuation?

[tiltonboy] 25/3/2011 08:41

1087 on the bid at 111, with 32,000 behind it at 110. 12,000 on the offer at 120, then 4000 at 121.25.

[skyship] 25/3/2011 08:28

Can anyone tell me what the order book looks like here - regrettably I don't have L2..

[skyship] 23/3/2011 17:40

Ydderf - don't worry - MCKS have just put in a double bottom. Will likely snap back up from here in short order...

[cockneyrebel] 22/3/2011 21:24

you Frauddy, knowing your history lol!

I've heard of being mister average but you are mister average down!

CR

[ydderf] 22/3/2011 19:07

skyship, did you think the radioactivity would reach the uk? i keep buying them for less and less......one of us is surely wrong - but is it me or is it mister market?

[skyship] 21/3/2011 14:01

Sold a few on the Japan tragedy - bt them back today @ 115.8p for a 7% yield!

[flying pig] 14/3/2011 16:02

Just a few at 118.4 ish - decent yield and some upside...

[skyship] 01/3/2011 12:21

Bizarre really, but people do sell for all sorts of reasons. I bought another 3k @ 119p this morning; so pleased to see the buyer returning and perhaps cleaning out the loose stock with that 47k @ 120p.

[kenny] 01/3/2011 10:25

Skyship - why is sentiment so negative on MCKS? The "good news" bounce has now been entirely retracted. Is it all to do with the effect of the swaps?

[skyship] 01/3/2011 10:13

Posted on the wrong thread methinks...

[sandbank] 01/3/2011 08:21

RNS OF THE DAY - MWE

"...Consequently, whilst the Board is disappointed at the cost overruns (which have only just become apparent), it believes that 2011 trading will be broadly in line with its previous expectations.

The preliminary results for the year ended 31 December 2010 are expected to be announced during mid March 2010."

[skyship] 28/2/2011 16:59

After that substantial volume of 11th Feb, the buyer held off and everything went back to sleep as the share price drifted back to c120p on just 93k of sales. I suspect this may prove another good buying opportunity, so took on a few more today.

[fhmktg] 14/2/2011 09:37

Signs of restoration of faith in the MCKS board, if not the sector overall.
Keep it coming!

[skyship] 11/2/2011 16:44

For MCKS that was truly massive volume today - 1.29m = 2.8% of the equity.

Chunky buys again at the close.

[kenny] 11/2/2011 10:07

Great news, NAV presumably now 195p. However, it is really annoying that some people clearly had advance knowledge and used that insider information to buy before the announcement. Should be investigated by the FSA.

[crawford] 11/2/2011 09:12

Excellent update.

[alanji] 11/2/2011 09:10

Definitely good news and I increased my holding this morning. The yield now looks sustainable in the short term and should increase medium term (maybe even short term). The discount to nav is now ridiculous. A predator could pay off the remaining swaps with ease (if they wished) and still have considerable profits left. As Skyship says the share price will not stay here for long.

[skyship] 11/2/2011 08:32

EXIT - time to eat your words perhaps.

The best time to bid for a Company is when the share price is at a low due to weakspot fundamentals. Things are turning for MCKS finally, so any bidder, if there is one out there, needs to act quickly as the share price will be making good progress from here.

I repeat this telling passage:

=========================================================

Favourable movements in long term swap rates have had a positive effect on NAV. Following completion of the restructuring, the negative mark to market value of the retained instruments of GBP15.94 million compares with GBP36.67 million as at 30th September 2010. After taking into account the cost of restructuring this equates to an increase of 32 pence per share.

=========================================================

[topvest] 11/2/2011 07:29

Good news.

[gingerplant] 11/2/2011 07:25

A mixed IMS statement from MCKS but generally good IMO - particularly ref swaps.

Key bits:

Interest rate hedging instruments have now been restructured to reduce the Group's over-hedged position.

Values for secondary properties with shorter leases requiring refurbishment or redevelopment are likely to continue to adjust to levels which make acquisition opportunities more attractive.

The Group void increased marginally from 10.3% to 11.2%. 60% of the portfolio void is contained within five properties which are all being marketed actively and are presented in good condition in established market locations.

A restructuring of the Group's financial hedging instruments has now been completed to reduce the notional sum by £50.00 million to £105.00 million at a cost of £5.93 million. This realigns the interest rate protection with the reduced level of Group debt following the recent downturn in property values.

As a result of the restructuring, any further downward movements in the market value of the remaining instruments will have a reduced impact on the balance sheet. The restructuring was implemented ahead of instruments reverting to higher swap levels from Spring 2011 onwards. Therefore, the anticipated increase in finance cost and the corresponding impact on earnings and dividend cover in future periods has been significantly reduced.

Favourable movements in long term swap rates have had a positive effect on NAV. Following completion of the restructuring, the negative mark to market value of the retained instruments of £15.94 million compares with £36.67 million as at 30th September 2010. After taking into account the cost of restructuring this equates to an increase of 32 pence per share.

[gary1966] 11/2/2011 07:20

Well I had ben looking to sell these but the limit wasn't met. Rather glad now that I have read the IMS. Happy to hold and may add a few now at these levels.

[exit234] 10/2/2011 10:29

"A bid would be great - with NAV at 163p and EPRA NAV at 231p"

On that basis it would be great. However, any party seeking to take this over would be in the business of buying property and not dubious interest rate swaps. I doubt anyone will touch this (for a take-over) at present with the current state of the derivatives it has on its books.

I hold a small position in MCKS, so think in the medium term there is good value and the company has a good track record. However, if I were looking to take over a REIT (I'm not) I would discard MCKS as soon as I'd finished reading the details of the financial instruments I'd also be buying into.

In summary: good med/long-term prospects? - possibly
takeover target? - highly unlikely

I look forward to eating my words :-)

[kenny] 09/2/2011 16:48

A bid would be great - with NAV at 163p and EPRA NAV at 231p. But it could instead just be an institution buying for a combination of the discount to NAV and the 7% yield. Time will tell!